Amarc Resources Ltd 6-K, filed Feb 28, 2022

Amarc Resources Ltd (AXREF)

6-K 2022-02-28 For: 2022-02-25

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Added on April 07, 2026

About this 6-K

Amarc Resources Ltd filed this 6-K on February 28, 2022.

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99.1		Condensed Consolidated Interim Financial Statements for the nine months ended December 31, 2021
99.2		Management’s Discussion and Analysis for the nine months ended December 31, 2021
99.3		Form 52-109FV2 Certification of interim filings – venture issue basic certificate - CEO
99.4		Form 52-109FV2 Certification of interim filings – venture issue basic certificate - CFO

	Amarc Resources Ltd. (Registrant)

Date: February 24, 2022	By:	/s/ Jeannine Webb
		Jeannine Webb
		Chief Financial Officer

			December 31,			March 31,
			2021			2021
	Note		($)			($)

ASSETS

Current assets
Cash		3		680,055			308,085
Amounts receivable and other assets		6		147,059			47,380
Marketable securities		4		283,072			1,026,418
				1,110,186			1,381,883
Non-current assets
Restricted cash		5		178,547			178,487
Right-of-use asset		13		87,426			-
Total assets				1,376,159			1,560,370

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued liabilities		8		311,502			168,195
Balances due to related parties		11		327,499			795,239
Lease liability		13		14,609			-
				653,610			963,434

Non-current liabilities
Director’s loan		9		644,642			570,000
Lease liability		13		86,020			-
Total liabilities				1,384,272			1,533,434

Shareholders’ equity
Share capital		10		65,044,721			64,744,721
Reserves		10		4,126,736			4,870,082
Accumulated deficit				(69,179,570	)		(69,587,867	)
				(8,113	)		26,936

Total liabilities and shareholders’ equity				1,376,159			1,560,370

/s/ Robert A. Dickinson		/s/ Scott D. Cousens

Robert A. Dickinson		Scott D. Cousens
Director		Director

				Three months ended December 31,						Nine months ended December 31,
				2021			2020			2021			2020
	Note			($)			($)			($)			($)
Expenses
Exploration and evaluation		6	(b)		1,210,119			282,062			4,993,106			1,237,047
Assays and analysis					133,434			43,028			268,050			129,042
Drilling					387,538			1,248			980,248			146,886
Equipment rental					–			875			–			875
Geological, including geophysical					274,753			60,107			921,359			393,190
Helicopter and fuel					86,163			28,800			910,699			208,347
Property acquisition and assessments costs					57,725			51,448			59,456			51,646
Site activities					213,838			31,026			1,504,625			177,470
Socioeconomic					31,246			11,145			224,733			65,622
Technical data					6,520			53,206			26,928			53,206
Travel and accommodation					18,902			1,179			97,008			10,763

Administration					137,385			87,269			385,349			387,435
Legal, accounting and audit					34,108			–			76,245			23,767
Office and administration		12	(b)		65,413			54,481			211,071			287,678
Rent					9,177			–			16,226			–
Shareholder communication					26,529			29,793			58,216			46,680
Travel and accommodation					1,243			2,000			1,428			7,008
Trust and regulatory					915			995			22,163			22,302

Equity-settled share-based compensation					–			2,645			–			15,420

Cost recoveries		6	(b)		(1,231,515	)		(141,182	)		(5,605,240	)		(1,221,230	)
Gain on sale of mineral property					–			(1,934,500	)		–			(1,934,500	)

					115,989			(1,703,706	)		(226,785	)		(1,515,828	)
Other items
Finance income					(3,218	)		(1,579	)		(17,072	)		(24,151	)
Interest expense – director’s loans		9			25,205			25,206			75,342			86,697
Accretion expense - office lease					2,819			–			7,728			–
Other fee income		6	(b)		(30,343	)		–			(336,164	)		–
Amortization of Right-of-use asset					23,726			–			32,133			–
Transaction cost – director’s loans		9			20,079			15,086			55,959			42,043
Foreign exchange loss					11			(77	)		562			(1,034	)
Net (income) loss					154,268			(1,665,070	)		(408,297	)		(1,412,273	)

Other comprehensive loss:
Items that will not be reclassified subsequently to loss:
Change in value of marketable securities					303,493			415,593			743,346			417,058
Total other comprehensive (income) loss					457,761			(1,249,477	)		335,049			(995,215	)

Basic and diluted (income) loss per share					0			(0	)		(0	)		(0	)
				(#)			(#)			(#)			(#)
Weighted average number of common
shares outstanding					182,559,416			180,580,916			180,849,132			178,029,901

	Share capital				Reserves
	Number of shares (#)		Amount ($)		Share-based payments reserve ($)		Investment revaluation reserve ($)			Share warrants reserve ($)		Deficit ($)			Total ($)

Balance at April 1, 2020		175,602,894		64,341,556		2,244,764		13,761			3,373,372		(70,948,566)			(975,113)
Net loss for the period		–		–		–		–			–		1,412,273			1,412,273
Other comprehensive loss for the period		–		–		–		(417,058)			–		–			(417,058)
Total comprehensive loss		–		–		–		(417,058)			–		1,412,273			995,215
Equity-settled share-based compensation		–		–		15,420		–			–		–			15,420
Subscription received for shares to be issued		–		–		–		–			–		–			–
Shares issued through exercise of warrants		3,000,000		403,165		–		–			(153,265)		–			249,900

Balance at December 31, 2020		178,602,894		64,744,721		2,260,184		(403,297)			3,220,107		(69,536,293)			285,422

Balance at April 1, 2021		180,602,894		64,744,721		2,262,652		(612,677)			3,220,107		(69,587,867)			26,936
Net income for the period		–		–		–		–			–		408,297			408,297
Other comprehensive loss for the period		–		–		–		(743,346)			–		–			(743,346)
Total comprehensive loss		–		–		–		(743,346)			–		408,297			(335,049)
Shares issued through exercise of warrants		6,000,000		300,000		–		–			–		–			300,000
Balance at December 31, 2021		186,602,894		65,044,721		2,262,652		(1,356,023)	)		3,220,107		(69,179,570	)		(8,113	)

2.	SIGNIFICANT ACCOUNTING POLICIES

	The principal accounting policies applied in the preparation of these Financial Statements are described below. These policies have been consistently applied for all years presented, unless otherwise stated.

(a)	Statement of compliance

	These Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”) and the interpretations by the IFRS Interpretation Committee (“IFRIC”). These Financial Statements do not include all of the information and footnotes required by International Financial Reporting Standards (“IFRS”) for complete financial statements for year-end reporting purposes. These Financial Statements should be read in conjunction with the Company’s consolidated financial statements as at and for the year ended March 31, 2021. Results for the reporting period ended December 31, 2021 are not necessarily indicative of future results. The accounting policies and methods of computation applied by the Company in these Financial Statements are the same as those applied by the Company in its more recent annual financial statements, which are filed under the Company’s provide on SEDAR at www.sedar.com. The Audit Committee of the Company’s Board of Directors authorized these Financial Statements for issuance on February 24, 2022.

(b)	Basis of presentation and consolidation

	These Financial Statements have been prepared on a historical cost basis, except for certain financial instruments classified as fair value through other comprehensive income, which are reported at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information. These Financial Statements include the financial statements of the Company and its wholly-owned subsidiary, 1130346 B.C. Ltd. (the “Subco”), incorporated under the laws of BC. The Subco was incorporated for the purposes of entering into an option agreement related to the JOY District. On March 30, 2021, Subco was dissolved, did not have any assets, liabilities, income or expenses, and all intercompany balances and transactions had been eliminated on consolidation. Certain comparative amounts have been reclassified to conform to the presentation adopted in the current period.

	·	Leases of low value assets; and

	·	Leases with a duration of twelve months or less.

	Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by the interest rate implicit in the lease, or if that rate cannot be readily determined, the Company’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate. On initial recognition, the carrying value of the lease liability also includes:

	·	Amounts expected to be payable under any residual value guarantee;

	·	The exercise price of any purchase option granted if it is reasonable certain to assess that option;

	·	Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

	Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

	·	Lease payments made at or before commencement of the lease;

	·	Initial direct costs incurred; and

	·	The amount of any provision recognized where the Company is contractually required to dismantle, remove or restore the leased asset.

	Lease liabilities, on initial measurement, increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortized on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if this is judged to be shorter than the lease term.

	When the Company revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount rate that applied on lease commencement. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised. In both cases, an equivalent adjustment is made to the carrying value. As of the initial adoption date of January 1, 2019, the Company does not have any leases that are required to be recognized as assets and liabilities. The Company entered into an office lease with an effective date on May 1, 2021.

(d)	Significant accounting estimates and judgements

	The critical estimates and judgements applied in the preparation of these Financial Statements are consistent with those applied in the Company’s audited consolidated financial statements as at and for the year ended March 31, 2021.

(e)	Operating segments

	The Company operates as a single reportable segment—the acquisition, exploration and development of mineral properties. All assets are held in Canada.

3.	CASH

	The Company’s cash is invested in business and savings accounts, which are available on demand by the Company.

4.	MARKETABLE SECURITIES

	As at December 31, 2021, the fair value of its current holdings was $283,072 (March 31, 2021 - $1,026,418) and the negative change of fair value adjustment of $743,346 for the nine months ended December 31, 2021 (December 31, 2020 –change of fair value adjustment of $1,217,443). The marketable securities include 5.5 million units (shares and warrants) of Carlyle Commodities Corp., a Canadian public company listed on TSX-V exchange.

Company	Shares/Warrants Held		Cost		Fair Value		Fair Value Increase(Decrease)
	(#)		($)		($)		($)
Carlyle Commodities Corp - Shares		5,500,000		907,500		137,500		(770,000	)
Carlyle Commodities Corp - Warrants		5,500,000		727,000		127,000		(600,000	)
Other		2,275,002		18,356		18,572		216
		13,275,002		1,652,856		283,072		(1,369,784	)

5.	RESTRICTED CASH

	Restricted cash represents amounts held in support of exploration permits. The amounts are refundable subject to the consent of regulatory authorities upon completion of any required reclamation work on the related projects.

6.	AMOUNTS RECEIVABLE AND OTHER ASSETS

	December 31, 2021		March 31, 2021
	($)		($)
Sales tax refundable		66,667		17,011
Contribution receivable (note 7(b))		59,305		9,851
Prepaid		21,087		20,518
		147,059		47,380

7.	EXPLORATION AND EVALUATION EXPENSES AND COST RECOVERIES

	Below is a summary of the Company’s major exploration projects and their associated royalties, where the Company is currently incurring the majority of its exploration work.

(a)	IKE District

	Refer to the discussion of IKE District under note 7(a) in the audited financial statements of the Company for the year ended March 31, 2021.

(c)	DUKE District

	The DUKE District is located in central BC. In November 2016, the Company entered into a purchase agreement with a private company wholly-owned by one of its directors (note 11(c)) to purchase a 100% interest in the DUKE property for the reimbursement of the vendor’s direct acquisition costs of $168,996.

8.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	Nine months ended		Year ended
	December 31, 2021		March 31, 2021
	($)		($)
Opening balance		570,000		812,119
Principal repayment		–		(300,000	)
Amortization of transaction costs		74,642		57,881
Closing balance		644,642		570,000

Finance expenses	Nine months ended December 31,
	2021		2020
	($)		($)
Interest on loan		75,342		86,697
Amortization of transaction costs		55,959		42,043
Total		131,301		128,740

	In December 2019, the Company entered into a loan extension and amendment agreement (the “Loan”) with a director and significant shareholder of the Company (the “Lender”), pursuant to which a previous loan agreement with a maturity date of November 26, 2019 was extended for five years or earlier pending the achievement of certain financing milestones. The Loan has a principal sum of $1,000,000, is unsecured and bears interest at a rate of 10% per annum. In December 2021, a total of $160,000 in interest was paid. Pursuant to the Loan, the Company issued to the Lender a loan bonus comprising of 16,000,000 common share purchase warrants (the “Warrants”) with an expiry of five years and an exercise price of $0.05 per share.

10.	SHARE CAPITAL AND RESERVES

(a)	Authorized and outstanding share capital

	The Company’s authorized share capital consists of an unlimited number of common shares without par value (“Common Shares”) and an unlimited number of preferred shares. All issued Common Shares are fully paid. No preferred shares have been issued. On August 20, 2020, 3,000,000 flow-through shares were issued pursuant to the exercise of warrants for gross proceeds of $150,000. On October 2, 2020, 2,000,000 flow-through shares were issued pursuant to the exercise of warrants for gross proceeds of $100,000. $100 related to flow-through tax filing has been deducted from the gross proceeds as issuance costs.


	Approximately $167,000 of the flow-through proceeds received were renounced to the shareholder as at December 31, 2020. The Company recognized no flow-through premium in excess of the fair value of these common shares at their dates of issuance. As at December 31, 2021, there were 186,602,894 Common Shares issued and outstanding. Pursuant to the exercise of warrants on December 2, 2021, 6,000,000 Common Shares were issued for gross proceeds of $300,000.

(b)	Share purchase options

	The following summarizes changes in the Company’s share purchase options (the “Options”):

			December 31, 2021					December 31, 2020
	Weighted Average Exercise Price			Number of Options		Weighted Average Exercise Price		Number of Options
Outstanding – beginning balance	$	0.05			2,000,000	$	0.05		2,000,000
Grant		-			-		-		-
Outstanding – ending balance	$	0.05			2,000,000	$	0.05		2,000,000

				Options Outstanding				Options Exercisable
Exercise price		Weighted Average Remaining Contractual Life (years)		Number of Options		Weighted Average Remaining Contractual Life (years)		Number of Options
$	0.05		2.76		2,000,000		2.76		2,000,000
Total			2.76		2,000,000		2.76		2,000,000

(c)	Share purchase warrants

	The following common share purchase warrants were outstanding at December 31, 2021 and March 31, 2020:

	Exercise price		December 31, 2021			March 31, 2021
Issued pursuant to the Loan (note 9(a))	$	0.05		16,000,000			16,000,000
Exercised				(11,000,000	)		(5,000,000	)
Total				5,000,000			11,000,000

	In December 2019, 16,000,000 share purchase warrants were issued pursuant to the Loan (note 9(a)). The fair value of these warrants at issue was determined to be $490,449 at $0.03 per warrant using the Black-Scholes pricing model and based on the following assumptions: risk-free rate of 1.57%; expected volatility of 144%; underlying market price of $0.035; strike price of $0.05; expiry term of 5 years; and, dividend yield of nil.

11.	RELATED PARTY TRANSACTIONS

	December 31, 2021		March 31, 2021
Balances due to related parties	($)		($)
Bookskipper Accounting & Tax Services		–		1,050
Hunter Dickinson Services Inc.		266,102		614,352
Robert Dickinson (interest payable)		61,397		174,816
United Mineral Services Ltd.		–		5,021
		327,499		795,239

(a)	Transactions with key management personnel

	Key management personnel (“KMP”) are those persons that have the authority and responsibility for planning, directing, and controlling the activities of the Company, directly and indirectly, and by definition include all the directors of the Company. Note 9 includes the details of a director’s loan. Note 7(b) and 7(c) includes the details of the acquisition of mineral property interests from a private entity wholly-owned by one of the directors of the Company. During the nine months ended December 31, 2021 and 2020, the Company’s President, Chief Executive Officer and Director; and Corporate Secretary provided services to the Company under a service agreement with Hunter Dickinson Services Inc. (note 11(b)). During the nine months ended December 31, 2021, the Company incurred fees totaling $22,500 in respect of services provided by the Chief Financial Officer. There were no other transactions with KMP during the nine months ended December 31, 2021.

(b)	Hunter Dickinson Services Inc.

	Hunter Dickinson Inc. (“HDI”) and its wholly-owned subsidiary Hunter Dickinson Services Inc. (“HDSI”) are private companies established by a group of mining professionals. HDSI provides contract services for a number of mineral exploration and development companies, and also to companies that are outside of the mining and mineral development space. Amarc acquires services from a number of related and arms-length contractors, and it is at Amarc’s discretion that HDSI provides certain contract services.

(c)	United Mineral Services Ltd.

	United Mineral Services Ltd. (“UMS”) is a private company wholly-owned by one of the directors of the Company. UMS is engaged in the acquisition and exploration of mineral property interests. There were no transactions with UMS that occurred during the nine months ended December 31, 2021 and 2020.

12.	SUPPLEMENTARY INFORMATION TO THE CONSOLIDATED STATEMENTS OF LOSS

(a)	Employees’ salaries and benefits

	The employees’ salaries and benefits included in exploration and evaluation expenses and administration expenses are as follows:

	Nine months ended December 31,
	2021		2022
Employee salaries and benefits ⁽¹⁾	($)		($)
Exploration an evaluation expenses		969,000		467,000
Administration expenses ⁽²⁾		190,000		183,000
		892,000		538,000

	(1)	rounded to the nearest thousand dollar
	(2)	includes salaries and benefits included in office and administration expenses (note 12(b)) and other salaries and benefits expenses classified as administration expenses

(b)	Office and administration expenses

	Office and administration expenses include the following:

	2021			2020
Right-of-use-asset	($)			($)
Balance at March 31		-			-
Addition		100,877			-
Amortization		(32,133	)		-
Balance at December 31		68,744			-

	2021			2020
Lease liability	($)			($)
Balance at March 31		-			-
Addition		100,877			-
Lease payment – base rent portion		(2,128	)		-
Lease liability – accretion expense		7,728			-
Balance as at December 31		106,477			-
Current portion		14,609			-
Long-term portion		86,020			-

Future lease payments (base rent portion only)	($)
Fiscal 2022 (January 1, 2022 to March 31, 2022)		13,416
Fiscal 2023 (April 1, 2022 to March 31, 2023)		26,746
Fiscal 2024 (April 1, 2023 to March 31, 2024)		28,056
Fiscal 2025 (April 1, 2024 to March 31, 2025)		28,165
Fiscal 2026 (April 1, 2025 to March 31, 2026)		28,165
Fiscal 2027 (April 1, 2026 to April 29, 2027) (Note 6)		2,347
Total undiscounted lease payments		126,895
Less: imputed interest		(26,266	)
Lease liability as at December 31, 2021		100,629

1.1	DATE	3
1.2	OVERVIEW	3
1.3	SUMMARY OF QUARTERLY RESULTS	21
1.4	RESULTS OF OPERATIONS	22
1.5	LIQUIDITY	23
1.6	CAPITAL RESOURCES	23
1.7	OFF-BALANCE SHEET ARRANGEMENTS	23
1.8	TRANSACTIONS WITH RELATED PARTIES	24
1.9	PROPOSED TRANSACTIONS	25
1.10	CRITICAL ACCOUNTING ESTIMATES	25
1.11	CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION	25
1.12	FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS	25
1.13	OTHER MD&A REQUIREMENTS	25
1.13.1	ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE	25
1.13.2	DISCLOSURE OF OUTSTANDING SHARE DATA	26
1.13.3	DISCLOSURE CONTROLS AND PROCEDURES	26
1.13.4	INTERNAL CONTROLS OVER FINANCIAL REPORTING PROCEDURES	26
1.13.5	LIMITATIONS OF CONTROLS AND PROCEDURES	27
1.14	RISK FACTORS	27